engleski

Exports and Exchange Rate Regimes in New EUCountries: Did Economies with Fixed Exchange Rate Regime Face with Higher Drop in Unit Labor Costs

This paper will investigate whether the differences in the exports performances in new EU countries are a result of different exchange rate regimes. Higher exports can be connected with improved price and non-price competitiveness. However, better price competitiveness could be achieved via nominal depreciation or relatively cheaper goods (fall in the relative prices or relative unit labor costs). Keep in mind that nominal depreciation is impossible in countries using fixed exchange rate regime and the real depreciation can be done using fall in relative prices or (relative) unit labor costs. This paper is focused on unit labor costs and studies whether their fall enabled to restore price competitiveness in few new EU members. The answer is positive but valid only in the part of the observed period (limited primarily on the recent crisis period).

exports, relative unit labor costs, regression analysis

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